top of page
Writer's pictureAda Tam Ying Ying
Oct 19, 20238 min read

18 Oct2023 Reports



SGX


Economic Calendar :


5 in 5 with EuroSports Global - Revving up Sustainable Urban Mobility



















 

Phillip Capital Market Reports:


Phillip Daily Morning Note :



US Market (By Phillip Global Markets Night Desk)

18 October 2023

Global Stocks Priced at Discount to U.S. Stocks

Global markets struggle in the new environment of higher interest rates, renewed conflict in the Middle East, and the ongoing battle between Russia and Ukraine. But one thing has not changed: U.S. stocks are more expensive than global stocks on numerous valuation metrics. Consider P/E ratios. The trailing P/E ratio on the S&P 500 is 20, above the global average of 12 and well above the 6-11 average P/Es for emerging markets stocks. A review of yields tells a similar story. The current dividend yield for the S&P 500 is 1.5%, versus the global average of 3.2% and Asian, Australian, and Latin American yields of 4%-8%. The foreign region that does not completely fit the pattern is the Middle East. The average P/E on a Saudi Arabian stock is a high 15.7 and the yield is a low 2.3%. This can be attributed to high oil prices. Taking a step back, one reason investors generally are willing to pay a higher price for North American securities is the transparency of the U.S. financial system as well as the liquidity of U.S. markets. What is more, global returns can be volatile across individual countries, given currency, security, political, and geopolitical risks; indeed, U.S. stocks (ETF SPY) have outperformed EAFE (ETF EFA) year to date -- as well as over the past five years. Even so, we recommend that growth investors have approximately 5%-10% of their equity allocations in international stocks to take advantage of the value, and we have been adding global stocks to our Universe of Coverage.

Market Wrap

Oil prices rallied and stocks fell as Iran intensified its rhetoric against Israel after an explosion at a Gaza hospital that complicated diplomatic efforts to rein in the Middle East conflict.

S&P 500 and Nasdaq 100 contracts lost at least 0.4%. Crude’s advance accelerated to more than 3% when the foreign minister of Iran, a major exporter, called for an oil embargo against Israel, before the surge in prices eased. Gold rose as investors snapped up haven assets.

Today's Big News

- Morgan Stanley’s Profit Slides on Investment Bank Slowdown

- Biden Says Israel Probably Wasn’t Behind Gaza Hospital Blast

- Singapore to Inspect Credit Suisse, Others in Major Scandal

- Israel’s Resolve to Destroy Hamas Unshaken by Hospital Blast

- Xi, Putin Hail Benefits of Alternative to US-Led World Order

- BOJ Could End Negative Rates by Year-End, Ex-Board Member Says







 

OCBC











 

DBS


  • US retail sales rose 0.7% m-o-m in Sep, higher than estimates of 0.3%

  • US expands restrictions on shipment of advanced AI chips and chipmaking tools to China

  • Goldman Sachs’ 3Q EPS of US$5.47 missed estimates due to write-down of Greensky and real estate investments


Singapore Market Focus

The blast that lifted oil and yield

  • Rate hike expectations jumped overnight on worsening Middle-East tension and stronger-than-expected US economic data

  • Latest impact on markets includes 1) Brent crude up 1.7%, 2) US 10-Yr Treasury yield rose 13bps, and 3) odds of final rate hike increased to 47%, according to Fed funds futures

  • What sectors are likely to be affected by these developments?

  • Click here to read our views

Artificial Intelligence Sector

Large Language Model to unleash Artificial General Intelligence

  • Computing power is a key competitive advantage in the evolution of AI models

  • China well positioned to capitalise on unprecedented opportunity

  • Which company will be a major beneficiary of China investment into AI?

  • Click here to read our views

Keppel DC REIT (KDCREIT SP)

Kissing good-bye to $2 in the foreseeable future

  • Uncertainty over Neo Telemedia, the master tenant at KDCREIT's Guangdong data centres emerged from the latter’s 3Q23 business update

Stock price tumbled below $2 yesterday accompanied by a ‘long black candle’ on high volume, indicating that this support level that had held up for the past 7 months has now turned key resistance

  • What are the key technical levels to watch?

  • Click here to read our views

Keppel REIT (KREIT SP)

Portfolio holding up better than expected

  • 3Q23 estimated DPU -1.1% y-o-y (+2% q-o-q) to 1.45 Scts, in line with our estimates, due to higher expenses and interest costs

  • Key positives: i) Higher signing rents, strong positive reversions, ii) improved occupancy to 97.8% (ex-Blue & William), iii) share buyback to continue at appropriate time, iv) some tenants looking to expand

  • What datapoints should investor look out for?

  • Click here to read our views

DBS Group Research | Equity Picks

Singapore Equity Picks: Read more

Hong Kong Equity Picks: Read more




 

UOB


UOBKH: Country Dailies: Wednesday, October 18, 2023

Click on the link for Greater China Daily.



UOBKH: Retail Market Monitor: Wednesday, October 18, 2023

Click on the link for details.





 

KGI


kgi: TRADING IDEAS: 🇸🇬 SINGAPORE

TRADING IDEAS: 🇸🇬 SINGAPORE

18 October 2023

🏙 Oversea-Chinese Banking Corp Ltd (OCBC SP): Keeping wealth under lock and key

BUY Entry 12.85 – Target – 13.40 Stop Loss – 12.58

🏢 DBS Group Holdings Ltd (DBS SP): SGD strengthens again

RE-ITERATE BUY Entry 33.10 – Target – 34.50 Stop Loss –32.35




Top Stories, 18 Oct 2023


1. Stock futures inch lower on Tuesday evening as earnings season picks up steam: Live updates

2. SGX FTSE China A50 Index Futures is the world’s only USD-denominated futures offering investors an efficient way to access the China A-share market.

Find out more: https://www.kgieworld.sg/futures/sgx-a50

3. Oil prices edge higher ahead of Biden Middle East trip

4. China's Q3 GDP seen slowing as Beijing races to revive growth

5. Biden cuts China off from more Nvidia chips, expands curbs to other countries


6. EUR/GBP pushing towards 0.8700 after Tuesday powerlift ahead of Wednesday's UK & EU CPI double feature




 

CIMB


SIN: Grand Venture Technology Ltd - Looking forward to FY25F (ADD - Upgrade)



CHN: Strategy Note - China’s 3Q GDP delivered positive surprise



MAL: CGS-CIMB Daybreak - 18 October 2023

▍ What's on the Table...


MAL: Sunway Bhd (ADD, tp:MYR2.57) - Controversial land deal aborted - 17/10

Sunway’s 559-acre BKIP2 land deal has been aborted, the Edge reported today. While land price was attractive, it removes a key overhang, in our view. We think Sunway will be able to recover the majority of the RM64m initial payment. Reiterate Add and TP of RM2.57 (10% discount to SOP).

▍ News of the Day....


Trendspotter – MY- KUB Malaysia (6874) (Technical Buy, 0.57): Ready for a breakout?

• Gov’t will publish a mid-term review of Budget 2024 implementation next year

• Sunway says UMech Land hasn’t received formal letter of termination from PDC

• Ambank inks green financing facilities worth RM129.8m with Avaland

• Maxis, Digital Penang to develop a technology ecosystem for MSMEs in Penang

• DNB, TM and ZTE Corp to unveil 5G live trial which could deliver 26Gbps

• MyEG receives a two-year extension of its immigration related services contract



CGS-CIMB SG/MY Preview - SG banks, SIA; SWB

SINGAPORE

DOW +13pts flat NDQ -34pts (-0.3%) SPX 0pts flat WTI flat GOLD (+0.2%)

US markets closed flat last night despite strong earnings from GS and BOFA. The weak returns were due to rates crawling back up with the US10Y currently trading at 4.836%. Semiconductors languished after the US renewed commitments to curb AI chip exports to China. Brent trades at the high $89/bbl lvl.

CGS-CIMB Highlights

* Banks We think that Singapore banks will likely post flattish qoq earnings as NIMs largely stabilise. Fees should hold steady but material recovery will take time. We watch out for FY24F outlook in 3Q23F briefings. Asset quality will likely be a key focus area and could determine share price trajectory of the sector. Reiterate Neutral. We think there could be limited upside to NIMs as banks prioritise volumes over margins, but dividend yields >6% are compelling. Our preference for 3Q23F is OCBC, UOB, then DBS. We expect stronger qoq performance vs. peers as impairments ease from a high in 2Q23.

* SIA (SIA SP) We expect SIA’s Jul-Sep 2023 (2QFY24F) quarterly EBIT to decline 16% qoq as jet fuel prices rose 20% qoq, while pax/cargo yields may have fallen qoq. We reiterate Reduce with a lower TP of S$5.66, now based on target P/BV of 0.91x (average since 2011) and rolling forward to end-CY24F. We previously used a target P/BV of 1.12x (1.5 s.d. above mean) but cut the multiple as higher oil prices now threaten our FY24-26F core EPS estimates.

* Keppel DC Reit (KDCREIT) 3Q/9M23 DPU of 2.492/7.543 was 3.6% /1.2% lower yoy, but in line at 24.3%/73.7% of our FY23F; topline growth wiped out by higher interest cost. KDC maintained occupancy at 98.3% in 3Q23, with single- to double-digit reversion on leases signed in the quarter. Reiterate Add on KDC’s resilient portfolio and attractive 5.4% FY24F DPU yield, which is at the +1.2 s.d. level.

* Keppel Reit (KREIT SP) 9M23 distribution to unitholders of S$163.6m was broadly within expectations, at 73% of our FY23F forecast. 3Q23 portfolio occupancy improved qoq amid positive rental reversions of +8.6% for 9M23. Reiterate Add rating, with an unchanged DDM-based TP of S$1.14.

* UMS Holdings (UMSH SP) We expect UMS Holdings to report 3Q23F net profit of S$12.2m (-71.3% yoy, +5.0% qoq) on 10 Nov 2023. We also expect DPS of 1.2 Scts for 3Q23F. With WFE spending expected to grow 15%in CY14F, we expect UMS to be able to deliver core EPS growth of 11.3-29.7% over FY24-25F. Reiterate Add, with a higher S$1.49 TP (previously S$1.19) as we roll over to FY25F.

OTHER NEWS * Dyna-Mac (DMHL) signed a long-term lease of a land parcel measuring 4.2 hectares along Gul Road from JTC. This will provide additional fabrication capacity for current and future projects and allows them to reorganise their yard capacity. * CSE Global (CSE SP) secured two contracts worth US$110.2m in the USA for the design and manufacturing of power distribution centres, and complex electrical and control systems and equipment integration which are slated for execution between 2024 and 2025. * Pollux Properties (POLUX SP) announced the resignation of CEO Jacob Lee Yen Min and subsequent appointment of Nico Purnomo Po to the post. * Metech Intl (CENR SP) has announced that the High Court has ruled that ex-director Deng Yiming must pay c.S$483,000, with interests payable at 5.33% per annum from 13 March 2023 until payment for missing diamond seeds and loose diamonds. Malaysia On Tuesday, the Bursa Malaysia market saw a rebound, echoing the positive sentiment in most Asian stock markets, led by the Philippines' PSEi. FBMKLCI gained 5.17 points, a 0.36% increase, closing at 1,444.13. The upturn was widespread, particularly in plantation, technology, and healthcare sectors, with only telecommunications, REIT, and energy sectors experiencing minor losses. Trading volume decreased to 2.68 billion shares, and trading value remained steady at RM1.92 billion. Market breadth turned slightly positive, with 439 gainers outperforming 353 decliners. The benchmark index formed an inside bar with a white candle, and notably, it remains above the critical 1,430-1,438 resistance-turned-support range, supported by all moving averages, indicating a relatively stable market outlook. OIL Oil inched slightly higher as a deadly explosion at a Gaza hospital boosted tensions in the Middle East. WTI: 86.66 (0.00%) Brent: 89.90 (0.28%) PLANTATIONS Palm oil finished at its highest level on worries about production in second- biggest grower Malaysia and a rally in rival soybean oil. 3rd MONTH FCPO: 3,784.00 (0.11%) CGS-CIMB HIGHLIGHTS Sunway Bhd (SWB MK) - Controversial land deal aborted (Maintain ADD; TP of RM2.57) https://bit.ly/46Y771X CORPORATE NEWS *Sunway Bhd (SWB MK) said its 70%-owned subsidiary Umech Land Sdn Bhd has not received a formal letter of termination of the joint development agreement from the Penang Development Corp (PDC). *Sime Darby Property Bhd (SDPR MK) final high-rise residential development, TRiARA Residences — has sold 216 out of 304 units launched on 23 Sep 2023, amounts to RM225.9mIL in bookings. *Sunsuria Bhd (SSR MK) inked a partnership with Island Hospital Sdn Bhd (IH) to open its first cancer centre in Penang. *Central Global Bhd (CGB MK) secured a RM15.24mil subcontract to supply plant, machinery, labour and material for a water supply construction project in Lahad Datu, Sabah. *MyEG Services Bhd (MYEG MK) said it has received a two-year extension of its immigration related services contract,and blockchain developer Zetrix is launching an initial exchange offering (IEO) on cryptocurrency exchange Coinstore. *AmBank (AMM MK) inked green financing facilities worth RM129.8mil with Avaland Bhd for Alora Residences on Tuesday. *Malaysia Airlines Bhd (MAHB MK) aims to fully restore its in-flight meal services by 15 Nov 2023, according to Transport Minister Anthony Loke.




 

Lim&Tan











 

MayBank



Keppel REIT (KREIT SP)

by Krishna Guha

GoTo Gojek Tokopedia (GOTO IJ) by Etta Rusdiana Putra

Vinhomes JSC (VHM VN) by Loi Nguyen Le Tuan

RHB Bank (RHBBANK MK) by Desmond Ch'ng

Mayora Indah (MYOR IJ) by Willy Goutama

Sunway (SWB MK) by Wei Sum Wong

Siam Cement (SCC TB) by Surachai Pramualcharoenkit



5 views0 comments

Comments

bottom of page